In the new issue of Regulation, economist Pierre Lemieux argues that the recent oil price decline is at least partly the result of increased supply from the extraction of shale oil. The increased supply allows the economy to produce more goods, which benefits some people, if not all of them. Thus, contrary to some commentary in the press, cheaper oil prices cannot harm the economy as a whole.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

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Fannie Mae Loan Limits: The Empire Strikes Back

Perhaps it was naive of me to believe that the public good, the taxpayer, might actually win one over the special interests. As I’ve previously noted, on Oct 1st, the maximum loan size that Fannie Mae and Freddie Mac could purchase declined. But it seems the special interests in the real estate-industrial complex were not willing to let that go. Currently on the floor of the Senate is the annual appropriations bill for HUD. Pending to that bill is an amendment by Senator Menendez that would extend the existing loan limit until December 2013.

First lets start with some basic facts. The decline would impact at most 10 percent of the mortgage market, maybe around $140 billion in mortgages. Given that banks have about a trillion in cash on their balance sheets and would only need about $20 billion in capital to support this level of mortgage lending, it should be crystal clear that there is more than sufficient capacity in the banking industry to absorb this segment of the mortgage market.

While I am open to any suggestions to reduce the role of Fannie Mae and Freddie Mac, lowering the loan limits appears a reasonable start. The burden of that decline would fall on the rich and upper middle class, those most able to afford it. If we can’t start ending housing subsidies for those that are well-off, how can we ever expect to get the real estate-mortgage industry out of the pocket of the taxpayers? Haven’t we allowed the banks to pass enough of their risk onto the backs of the taxpayers?